Active memecoin ETFs have a ‘good chance’ next year: Analyst

According to a Bloomberg ETF analyst, the emergence of actively managed exchange-traded funds (ETFs) focused on memecoins in the United States may be on the horizon.

Eric Balchunas, a Bloomberg ETF analyst, suggested in a June 7 X post that there's a "really good chance" an ETF that actively trades memecoins will become a reality. He anticipates that after a wave of active crypto ETFs, a dedicated memecoin fund could surface around 2026.

The surge in memecoin trading this year, particularly among retail investors, has propelled the total market capitalization of these digital assets beyond $60 billion. This growth could incentivize ETF issuers to create products that capitalize on this evolving segment of the crypto market.

Balchunas's comments were prompted by an X post from the team behind the "Vladcoin" memecoin, which proposed an ETF that actively manages memecoins, dynamically buying and selling based on performance. The concept is to "hold the promising ones and sell off the weaker ones."

This contrasts with passively managed ETFs, which offer exposure to a fixed asset or basket of assets rather than a dynamically adjusted portfolio.

Source: Eric Balchunas

The Dogecoin ETF Watch

Balchunas further noted that once tokens are clearly outside the scope of the 1933 Securities Act, they become eligible for inclusion in active ETFs. He highlighted the potential significance of the Dogecoin (DOGE) ETF application, stating it will "tell us a lot." Several ETF issuers, including Grayscale, Bitwise, and 21Shares, have already filed for spot Dogecoin ETFs this year.

Earlier filings also included proposals from Osprey Funds and Rex Shares to the Securities and Exchange Commission (SEC) for ETFs based on Dogecoin, Official Trump (TRUMP), and Bonk (BONK).

Polymarket Odds Shift

While Balchunas initially estimated a 75% probability of the SEC approving a spot Dogecoin ETF this year, the odds on the blockchain prediction platform Polymarket have since decreased to 44%.

To date, the SEC has not approved any memecoin-based ETFs or ETFs focused on other altcoins, such as Solana (SOL), XRP (XRP), or Litecoin (LTC), despite numerous applications being submitted this year.

Related: More than 70 US crypto ETFs await SEC decision this year — Bloomberg

Memecoin Market Correction

Following a peak in January, the memecoin market has experienced a correction, with many higher-capitalization tokens declining significantly from their peak values.

The Official Trump coin, for example, struggled to maintain momentum even after Eric Trump announced plans for World Liberty Financial to acquire a substantial amount of the token. TRUMP remains significantly down from its all-time high, and many other memecoins are experiencing similar declines. Dogecoin is down considerably, Shiba Inu (SHIB) has also lost a significant portion of its value, and Pepe (PEPE) has also seen a considerable decline from its peak.